“Best blind date ever!”
That’s how SoulCycle cobuilder Julie Rice described her initial meeting over lunch with Elizabeth Cutler.1 The women were looking for an innovative alternative to indoor fitness clubs—where members could mix social networking and fun while pedaling off calories. Rice explained the genesis of their concept and partnership: “[Elizabeth and I] talked about creating an entirely new exercise concept, a fitness ‘experience’ designed to be physically challenging, emotionally uplifting, and spiritually inspiring. And more than anything, we wanted to make it fun. We talked about chic design, cool branding, and a departure from all things people found frustrating about gyms. We sketched a rough business plan on a napkin and agreed to meet again the following week. When I walked outside, my head was spinning. I hailed a taxi, and before I could even close the door, my phone rang. It was Elizabeth. ‘I’m going to look for a rental space; you research towels.’ Five months later, we were open.”
Their husbands also got involved, one as chief marketing officer and the other as the creator of the brand name. Fast (or more appropriately, spin) forward nine years. The two cobuilders sold SoulCycle to Equinox in 2011 for a handsome sum, and by 2016, the company had almost ninety locations and more than four hundred thousand pedaling customers.
Rice, like a Captain, attributes Cutler’s and her success to their differences and their synergy: “We’re complete opposites. We just happen to have incredible business chemistry. I’m conservative and risk averse. Elizabeth is a baller [read Driver]. When you’re honest about your strengths and weaknesses and accept your role in the organization, there’s no toe stepping, no ego issues, and things run much more efficiently.”
Starting a business, much less building it into a large and durable enterprise, is never easy, and it’s often a lonely endeavor. It’s no surprise many builders—perhaps you included—choose to embark on that adventure with cofounders. That’s a decision that immediately puts the issue of Builder Personality front and center—for both of you.
Just take a look at this partial list of cobuilders:
These builder partnerships cut across industry, geographic, gender, and cultural lines. This chapter discusses the potential and perils of the delicate but intense cobuilder relationship. The matchups highlight the importance of understanding—and respecting—how Builder Personality shapes the entrepreneurial process. More specifically, we’ll show you how to deal with three big issues: choosing the right cobuilder, collaborating with him or her (or them), and flagging potential conflicts between and among you.
Presumably you would not rush into marriage without really knowing your prospective spouse. You’d want to be compatible on the issues that matter, trust each other, have similar goals for the marriage, and be able to handle and resolve disagreements, among other matters. And here’s a builder reality check: especially in the early years of building a business, you are likely to spend more waking hours with your cobuilder than with your spouse. And unfortunately for the ideal of marital bliss, those business marriages may outlast the domestic ones. Divorce of either kind is not a desired outcome. So getting to know your prospective cobuilder—his or her gifts, gaps, games, quirks, and character—is important stuff for both your sanity and the success of your business.
Have you and your potential partner worked with one another before in high-stress situations? Have you—like Bill Gates and Paul Allen, Ben Cohen and Jerry Greenfield, or Howard Lerman and his rowboat mates—been friends since high school? Maybe you met in college or graduate school, like Sergey Brin and Larry Page or Jenn Hyman and Jenny Fleiss, or went camping together on a two-week wilderness trip, like Bill Hewlett and Dave Packard. Perhaps you’ve worked closely together, as did the cobuilders of Pixar and Intel. Or just happened to meet over lunch and—like SoulCycle’s cofounders—had a gut feeling you would make a good pair, as Paul English did when he met Steve Hafner, his cobuilder of Kayak.com: “Steve and I are similar in many ways, but we are also very different in actual technical skill set. But we both detected a level of aggression or commitment in the other one and felt that, ‘Wow, if you put two cofounders together that are this aggressive . . .’”2
Finally, like countless other cobuilders such as Jin Sook and Don Chang of Forever 21, Gary Erickson and Kit Crawford of Clif Bar, or Kevin and Julia Hartz of Eventbrite, maybe you already are actually married to one another.
However and whomever you met, hopefully you have gotten to know, respect, and trust the person you have chosen to build with. That relationship is the bedrock on which your business will be built. And with any luck, the relationship will survive intact and maybe even strengthen, regardless of how the venture evolves. But such a connection will take real effort and attention to the kinds of personality issues we discuss in this book.
All these cobuilder relationships are like marriage in other respects as well. The goal is more than mere compatibility. And the challenge is to base a relationship on mutual respect in pursuit of a common goal. While you may share certain capabilities and values, your skills are ideally more complementary than conflicting—and your respective decision-making prerogatives are clear. In effect, your strengths offset the weaknesses of the other person, and vice versa—the proverbial whole being greater than the sum of its parts.
The decision to cobuild invokes the counsel given in many wedding ceremonies: “This commitment should not be entered into lightly.” Several factors come into play when you’re considering building a venture with others. In fact, there are so many dimensions to consider, this topic could fill an entire book by itself.
Our intention here is not to give you a detailed treatise on the topic, but rather to examine the issue through the lens of Builder Types. The core question is this: Are the cobuilders truly coequals? To answer that, consider how you plan to handle four key aspects of governance and reward: splitting the ownership pie, decision making, title, and responsibility.
Here’s a useful way you might think of these four dimensions, in light of the Builder Personalities involved. Remember, there is no single right solution to this builder-builder fit puzzle. Nor does resolution in one area dictate an answer in another.
Builders and their prospective cobuilders should determine whether they have the same expectations on these four dimensions and others that we will discuss later. Sadly, ambiguity or a lack of shared understanding often results in bitterness, an unstable relationship, and ultimately a fracture that destroys both value and relationships.
Every business builder has to figure out how to divide the company ownership pie. Who gets what share, when, and why? How much should you reserve for future contributors? What kind of ownership structure best fits your vision for how stakeholders get rewarded? Questions like these are important to address as early and candidly as possible.
The math involved in these questions is important, obviously, but its precision and apparent objectivity mask the powerful subjective forces and feelings involved here. What is fair? Why does person A get x percent of the company and person B get y percent? What truly motivates people’s best performance: stock or cash compensation, his or her title in the company, recognition, a sense of being on a great team, or something else? These are complex and highly personal issues you as a builder have to weigh, regardless of how you choose to work out the math itself. And there is no single right answer here.
There are two additional thoughts to consider. First, if you are the real animating spirit of the business, don’t immediately assume it will take a fifty-fifty ownership arrangement to attract a genuine cofounder to help you launch your venture. You can invite someone else to share the headaches and decisions of being a cobuilder with as much transparency and access to information as you are comfortable with. It is quite common to bring extraordinarily talented cobuilders into a fledgling company with far less equity than 50 percent.
Second, try to avoid giving away something permanent (like ownership in your company) for something of possibly temporary value (like the early contributions of a technical or marketing cofounder who loses interest or isn’t as great as you both needed this person to be). Vesting both of your ownership stakes can cure a lot of ills here, however you divide the pie. After all, it’s the lasting value of each other’s actual contribution to the venture’s success that really matters.
How will cobuilders divide management roles, decision-making authority, and responsibilities to get the work done? Who decides strategically important matters? Who has the final say when a significant disagreement occurs? Who’s responsible for which company activities on a day-to-day basis? The answers to these questions may not reflect—and don’t need to reflect—the math of ownership shares per se.
Some cobuilding teams are true coequals—Ben Cohen and Jerry Greenfield, Bill Hewlett and Dave Packard, William Procter and James Gamble, and so on.3 Other times, the founder decides to recognize his or her first set of followers as cofounders of the endeavor. A good example of this latter model is Alibaba, in which Jack Ma, the archetype Captain, recognized all sixteen of his friends who joined him in his small apartment in Hangzhou, China, as cofounders. But the Alibaba equity pie was not divided into seventeen equal slices.
True fifty-fifty decision-making pairings can be problematic, with or without the shared title of co-CEO. They are also fragile undertakings—despite the best intentions with which they begin. When a venture is at its earliest stages, with a wide-open future ahead, it’s easy to share both excitement about what’s possible and enthusiasm for the tasks ahead. But as the reality unfolds and the partners learn what success will require—the sacrifices and tough choices around strategy and people, not to mention unpredictable turns in the market and possible discoveries of one another’s shortcomings—those early bonds can unravel.
These fifty-fifty relationships are the most fragile over time, as the business morphs and adapts to market circumstances and operational realities. Take a look at how the complex relationship between Gates and Allen or between Jobs and Wozniak unfolded and, to some extent, unraveled over time. But coequals can work effectively if both parties are wise and flexible enough to agree on the key elements of their collaboration. The issues that matter—decision-making and tie-breaker authority; accountability; alignment of mission, values, and cultural foundations; ownership stakes—are the same ones we’ll explore later in greater detail with the more common and unequal cobuilder arrangements. But they are particularly pronounced in these fifty-fifty couples.
Fundamentally, a builder can choose a clone, a complement, or an opposite as a cobuilder. Here are three examples. At Google, Brin and Page look like a pair of comparables, each with Crusader-esque vision and Explorer-like problem-solving instincts. The Gates and Allen pairing was basically between complements, at least for a while—Gates as the Driver, get-it-done partner and Allen as the Explorer (ditto for the Jobs and Wozniak duo). But opposites can also attract. That’s what happened in the creation of SoulCycle and Kayak.com.
Each combination poses different challenges and possibilities. A pair of similar types tends to magnify the same gifts and gaps of each respective type. A complementary couple can do well, if they can sort out who does what when, while a pair of opposites might get stalemated arm-wrestling with each other. In the next section, we will look at the likely patterns of collaboration and conflict various builder relationships can create.
As mentioned, our focus is on decision making—who calls the shots in multiparty relationships. A cobuilder partnership in which each personality pulls against the other is a recipe for failure. Tug-of-war differences are often magnified throughout the organization, and schisms develop. Different employees align themselves with one cobuilder or the other, creating counterproductive intramural conflict.
Decision-Making Role: Cobuilder Pairings
While there are multiple flavors of cobuilder partnerships, figure 6-1 shows how various Builder Type pairings are likely to interact with each other across the five growth dynamics. Each axis is labeled with the primary decision-maker personality across the top and the secondary cobuilder’s personality down the side. This interaction is the key issue—because the combination of strengths and style preferences of each personality, when combined with clear decision rights, can either draw the best out of the cobuilder or the opposite—inciting conflict.
We give a thumbs-up for synergistic pairings, a thumbs-down for problematic, conflict-prone ones, and a thumbs-sideways for cautionary ones that may need special attention. Your results may vary, but the figure points out areas worth serious, candid discussion with your prospective cobuilder. You will not find it surprising that we rate the polar complement (the term we defined in chapter 1) pairings as thumbs-up, for the very reason that the contrast in strengths and weaknesses can be the source of an effective and powerful cobuilding partnership.
Here is a brief overview of the key dynamics at play for each pairing and some specific advice for each one. In the lists that follow, the initial personality shown in all capitals has the primary decision-making role.
If you’re a Driver, you probably have trouble sharing the steering wheel. But as long as you occupy the primary tie-breaking role, you can benefit from joining forces with other Builder Types whose perspectives and style can smooth some of your own rougher edges. The challenge for you is whether you can allow a cobuilder to play his or her role to the maximum benefit of both of you.
As long as the cobuilder brings his or her own problem-solving chops to the table, Explorers can be good matches for other Builder Types—with one exception, the Driver, who has a similarly control-oriented intensity.
Crusaders, like Drivers, probably benefit most from pairing up with another builder, however for different reasons. If you’re a Crusader, you might, with the right match, link your lofty vision with the operational practicalities of making it happen. The question is whether your vision is flexible enough to accommodate the different leadership and management approaches of another Builder Personality working side by side with you.
If you’re a Captain, you can be the most compatible cobuilder of our quartet—not surprising, given your comfort with collaboration and consensus building. But your we-versus-me-based leadership style should not be confused with the lack of a clear agenda. As a Captain, you are often focused more on getting your colleagues aligned around that agenda than on participating in group decisions. That’s why we give you a mixed scorecard below.
The bottom line on these tandem builder arrangements is this: anytime you put two strong-willed, ambitious, and confident individuals together, you can expect fireworks. Cobuilder pairings can work wonderfully, as long as the decision-making rights and areas of primary responsibility are clear, both for the individuals and to the organization the builders are leading. Forming those arrangements with a better insight into the underlying personality pluses and minuses of the two Builder Types should make that conversation and negotiation more productive.
There are many combinations and permutations of cobuilder relationships, from two-person arrangements to multiparty teams like those that founded Warby Parker and Pinterest. And sometimes, several enthusiastic cofounders remain tethered together only for a short time, leaving one or two members of the initial band to stick with the venture after the others lose interest once the rigors of business building become clear.
Our experience and research suggest that the complexities multiply rather than simply add for every additional individual involved. But the inclusion of other people might also make it easier to avoid irreconcilable standoffs. So don’t rule out that possibility if a threesome or “more-some” intrigues you. And remember our advice about vesting curing many sins.
A Trio Starts at Airbnb
Two designers and an engineer walk into a bar . . . well, actually, the meeting took place elsewhere, but out of those early discussions about rethinking the entire hotel and couch-surfing experience came an idea to democratize it. With Driver Joe Gebbia and Crusader Brian Chesky on the guest and host experience and design side, and Explorer Nathan Blecharczyk handling engineering, Airbnb opened up a new world of private apartments and homes to visitors worldwide.
“It’s pretty unusual, and I actually attribute a lot of our success to that combination,” Blecharczyk says. “We see things very differently because of our backgrounds and we’ve discovered that’s an asset. Sometimes it takes a little longer to reconcile our perspectives, but we find if we take the time to do that we can come up with a superior solution. One that takes into account both points of view.”4
However many individuals you are considering as cobuilders, we suggest you focus on the basic building unit here: two individuals and their personalities. If you can solve the chemistry of that collaboration, you might be ready to tackle the higher math of trios, quartets, and beyond.
If you’re a builder considering beginning a cobuilder relationship, we suggest you first take a careful look at what kind of arrangement you want (the “co-what?” question). Then explore each other’s motivations, decision-making patterns, and leadership and management style.
If both of you haven’t yet discovered your precise Builder Personality, you might start by visiting our www.builtforgrowth.com website to do that. Then you can sit down with your counterpart to compare notes on how your types might complement, match, or conflict with one another, and see if there is a meeting of the minds on how to handle those situations. These issues are good places to start a more productive discussion—a kind of builders’ prenuptial, if you like—to get the best of your mutual aspirations as you build this venture together.
Too often, advisers jump to the view that the aforementioned issues are necessarily matters for negotiation, often with lawyers involved. This viewpoint almost inevitably assumes, and sometimes even creates, an adversarial arm-wrestling posture for both parties. It also may miss the possibility of more genuine conversation around these issues—a conversation that produces a clearer understanding of what’s really important to each individual.
For example, you might assume questions such as title and compensation, both obviously important issues to settle, matter equally to both of you. Often, that assumption is not correct; one person may care far more about being in charge of customer-facing marketing or sales, while the other really enjoys running things behind the scenes or being in charge of design or engineering.
We suggest a slightly different way to get these issues on the table for discussion and handshake resolution before you call in the attorneys. It’s an old-fashioned approach: face-to-face conversation with deep listening and reflection from both players.
If you’re prepared to try this first, you may be pleasantly surprised to discover your areas of agreement and accommodation are much larger than the zones of disagreement that will require some frank, tough negotiation between you. Here’s a starting list of the issues you should discuss, framed as questions worthy of back-and-forth discussion:5
These questions don’t read like the usual checklist for a buy-sell agreement between partners or a laundry list for a prenuptial agreement. This list is different because we want to encourage you to explore some of these deeper-level matters that tie more directly and importantly to who you are as individuals first. Your personalities will manifest themselves inevitably as you go along, so you’ll be better off if you understand one another’s makeup sooner rather than later.
There will be many other issues to handle, several of which will probably require legal help. And remember, lawyers are very good at memorializing agreements already struck by their clients; attorneys do not always have to wear their negotiating hats to be effective advisers. Direct conversations between you and your prospective cobuilder can, at the very least, narrow the range of issues for which you’ll need outside counsel before you get too far along in the building process.
And yes, it’s probably a good idea to put it down in writing with the help of an experienced attorney. We’ve seen too many handshake understandings evaporate in the aftermath of imperfect memory, not to mention the antipathy that may arise from builder pairings gone awry.
We’ll leave the final words of advice here to Guy Kawasaki, who nicely captures the essence of what a great cobuilder relationship needs to have: “Some people like to sweat the details (microscopes). Others like to ignore the details and worry about the big issues (telescopes). A successful startup needs both types of founders to succeed (gyroscopes).”6